Question

What types of stock can a corporation issue? Select one: a. Preferred stock can be issued,...

What types of stock can a corporation issue? Select one: a. Preferred stock can be issued, but not common stock. b. Common stock can be issued, but not preferred stock. c. Both common stock and preferred stock can be issued. d. Neither common stock nor preferred stock can be issued.

Homework Answers

Answer #1

Option (c) is correct. A corporation can issue both types of stock,common stock and preferred stock.Both stocks create equity in the company for stockholders.Common stock is the baiscownership interest in a corporation.Common shareholders bear the ultimate risk of loss and receive the ultimate benefits of success. Preferred stock is an equity security with preferences and features not availabe to common stock. Prefereed stock include a preference relating to dividend payment,payment on liquidation.

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